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Friday, 18 April 2008 06:50

The rise and rise of mobile data usage

A new study by m.Net corporation and the University of Adelaide shows that mobile data services (MDS) on mobile phones – purchasing, communications, information and entertainment – are finally reaching “critical mass”.

After two decades of mobile voice services through mobile phones, and nearly a decade of mobile data usage through SMS services, mobile data services (MDS) of a more traditional Internet style is finally on the up in a big way.

The m.Net and University of Adelaide study notes that: “It has taken a while, but mobile data services (MDS) use is now disseminating beyond a small number of high level users to the wider market, according to the Wireless data services study 2007.”

The study is done on an annual, international basis, and “investigates mobile phone user engagement beyond voice and looks at the current type and levels of MDS, the influencing factors and barriers to the use of MDS, and the use of MDS across global markets.”

MDS is defined as “all of the digital data services that you access through your mobile phone excluding voice calls”. As you’d imagine, this includes “purchasing, communications, information and entertainment.”

Unsurprisingly, the study found MDS is an important factor in the choice of carriers and handsets. Clearly it would be a very important factor based on cost, the absence (or presence) of roaming charges, the speed of the network and the speeds each handset is capable of - think of the Nokia N95, the Apple iPhone, and other high-end models from Sony Ericsson, Samsung, LG and others.

Dr Marisa Maio Mackay, Director of Research, m.Net Corporation confirms this by saying that: “Cost is still a key barrier to the use of MDS, but there is certainly starting to be a change in mindset, and the masses are starting to come on board with MDS.”

Dr Mackay continues: “MDS wasn’t even on the radar 12-18 months ago, but it’s becoming an influencing factor in not only the measure of carrier satisfaction, but also in what would encourage consumers to change carrier if they had better MDS offerings. Overall, 60% of respondents consider MDS a reason to change carrier.”

This statement vindicates, in my mind at least, the efforts of some carriers to dramatically lower the cost of mobile data, with high costs a clear and obvious impediment to MDS uptake before now.

Dr Mackay also notes that better features on phones are also important, giving the example that: “The usability of the handset is also becoming more important to consumers (80% of respondents wanted a larger screen, for example). This sets the groundwork for the use of the phone beyond voice and SMS.”

So, what about MDS usage at home, where Internet connected computers are available? And what are some surprises? Please read onto page 2.

It’s great to see that another key finding was that “people are just as likely to use their mobile phone for MDS at home as they are when they are out and about.”

Dr Mackay says that this reinforces the importance of innovation, not replication on the mobile phone.

Explaining further, Dr Mackay says that: “People don’t want to see exactly what they see on their PC, TV or in magazines on their phone. They want something that is complementary, an offering they can’t get elsewhere. Nor do they just switch off their phone when they go home. The mobile phone is clearly not a replacement for their other tools.”

Clearly it is not, but instead a new tool that not only performs a range of functions found on standalone devices, but offers new functionality and benefits – both online and offline - that users are finally starting to really embrace.

Dr Mackay offers the following advice: “Companies in the mobile space, and not just carriers, need to provide a completely separate offering and create an experience that is unique and innovative. While it should tie into what they are offering through their other channels, it should not replicate it.”

Now for some stats from the MDS study. At last, the access of web sites directly on phones is growing rapidly, compared with past research, likely because of improved mobile browsers and cheaper data rates – we aren’t in the text based WAP era any more!

Over 40% of Australian respondents saying they had access the web on their phones – and it’s “without any apparent cannibalisation or impact on the use of the Internet on their PCs.”

In terms of actual MDS usage, communication dominates, with 80% of respondents in Australia often or sometimes using communication services. In Australia the use of mobile media messaging is particularly high (54%).

So, what about all that walled garden of content that is, at last, supplement by access to the real web, giving users the best of both worlds? Please read onto page 3 - and see page 4 for a supposed surprise that didn't surprise me in the slightest!

Other stats include almost 40% of Australian respondents regularly use information services, while 30% are regular users of entertainment on their mobile phones in Australia.

However, the use of purchasing MDS is lower, due primarily to the limited services currently available – and this is seemingly despite the ever growing ‘walled gardens’ of content that carriers offer – while also giving their customers the freedom to surf the web and access any other web services now available, be it YouTube, streaming media, Facebook, news sites or anything else.

Weather and news remain popular – likely because they are part of the easily accessible and properly screen formatted walled garden of content, but interestingly - entertainment, musical gigs and audio and video downloads are all growing as services people have used, but not necessarily purchased, while the growth of ring tones has actually dropped.

My personal view is that ring tones are cool, but as they’re more expensive than a digital download, savvier phone users are probably figuring out how to convert their legally – or illegally – downloaded music into a ringtone on their own.

Likewise, I believe that musical gigs, audio and video downloads probably need better pricing – i.e. cheaper pricing – and have still been limited by the capabilities of phones, although in 2007 and 2008 this is clearly rapidly changing as mobile phones rapidly transform into ever more capable and HSDPA broadband enabled “portable multimedia computers” that can download and/or stream large music and video files ever faster and more reliably – while costs for MDS continue going down, down, down.

Dr Maio Mackay explanation is that: “This reinforces the idea that when companies in the mobile space are communicating through MDS, they need to provide a mix of interaction and content that reflects both current behaviour and growing tends. For example, you might send people an SMS message and attach an audio clip, and people expect that, especially from companies with whom they have an existing relationship.”

Although almost half of respondents only use MDS for less than 10 minutes a week, the study believes that, as MDS costs are coming down, usage this is likely to increase.

On a personal basis, my usage of MDS is far, far higher than a mere 10 minutes a week, but clearly as I style myself as a technology evangelist, this is something you would expect.

So, what was a big surprise to Dr Maio Mackay when it comes to mobile data services, something that, to me at least, is absolutely NO surprise at all? And who ends up paying for phone bills? Users themselves, their companies or their parents? The answer might surprise you. Please read onto page 4.

For some odd reason, Dr Maio Mackay is also “surprised that almost 60% of Australian respondents are willing to pay some fee for unlimited MDS access.”

Why in heaven’s name is this a surprise? Flat rate services benefit the consumer enormously, rather than a ticking clock of charges than can result in some serious bill shock.

But Dr Mackay has an explanation, and says that: “It’s a significant change in mindset that they’re now assigning a certain value to MDS. Generally they’ve been prepared to pay nothing or it’s been in exchange for advertising through a third party model”.

Perhaps people were prepared to pay nothing because there were virtually no decent MDS services available in the past, prices were very high, screens were small and in black and white, information was textual with little graphics, video or audio and phones were slow. But this has all changed.

As for accepting advertising, see the above paragraph for why people weren’t interested in MDS in the first place, and ask yourself if useless services would have been used by anyone, whether with advertising or not. I think you know the answer.

Of note is the study’s finding that “around 80% of people, regardless of age, pay their own mobile phone bill, somewhat debunking the notion that many younger people have their bills paid for by their parents and others by their employers”.

Dr Maio Mackay points out this means “there is usually only a single decision-making point, which is good news for companies.”

Finally, although 60% of respondents pay by monthly plan, capped monthly plans have become more popular than uncapped ones. This is clearly no surprise, capped plans offer seriously better value than non-capped or most pre-paid plans.

Dr Maio Mackay believes this “reflects the bundling that carriers are offering in their price packaging, which again is more conducive to MDS, as a capped plan can include more access to MDS.”

So, what was the methodology used in the study?

m.Net Corporation says that: “The Wireless data services study is an annual online survey in which respondents in participating countries are required to answer a core set of questions. In 2007 Australia, Finland, Greece, Korea, Taiwan and the USA took part.”

The methodology statement continues: “It was conducted in Australia in November 2007 by m.Net and its academic partner the Department of Commence at the University of Adelaide, and comprised 949 local respondents. The results for 2007 were generalisable for the 18-50 age group.”

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Alex Zaharov-Reutt

One of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.



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